The Current Indirect Exchange Rate Is 11 Pesos Per Dollar

question 11

Multiple Choice

The current indirect exchange rate is 11 pesos per dollar.The anticipated annual inflation rate is 5% in the United States and 8% in Mexico.What is the forward exchange rate?

• A)Ps11.3143/$
• B)Ps11.2375/$
• C)Ps11.1425/$
• D)Ps11.0526/$

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Definitions:

Perpetual Inventory System

An inventory management system that tracks the sale and restock of inventory items in real-time.

Merchandise

Products that are purchased, stored, and sold by businesses, typically in the retail industry.

Cash Payment

A transaction in which a payment is made in the form of physical currency or through a digital mechanism but representing immediate transfer of funds.

Merchandise

Goods or products that are bought and sold by businesses in the course of their trade or business operations.